Botswana, Africa's diamond, risks losing its sparkle

Mon Oct 27, 2014 9:11pm EDT
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By Tiisetso Motsoeneng and Joe Brock

GABORONE (Reuters) - When environmental scientist Bakang Bogopa graduated first in his class from the University of Botswana two years ago he did not expect that his first job would be moving furniture or that he would still be living off handouts from his mother.

Bogopa, who studied on a government scholarship, is among thousands of unemployed graduates in Botswana who exemplify both the country's swift economic progress in the five decades since independence from Britain, and the challenges it now faces.

One of the world's poorest countries in the 1970s, Botswana transformed into one of its fastest-growing economies by harnessing around $3 billion a year in diamond sales, to become the world's biggest producer, and gained middle-income status.

The landlocked country of just 2 million has also been heralded as a beacon for African democracy, avoiding the conflict and corruption that has ravaged resource-rich countries across the continent.

But dependence on its wealth from the diamond industry is catching up with the southern African country.

Diamond revenues have enabled it to build a much-admired education system, but also allowed the ruling Botswana Democratic Party (BDP), in power since independence in 1966, to secure economic growth without diversifying into newer industries or implementing reforms to develop the private sector.

As a result, the economy is not sophisticated enough to employ many of the country's expanding stream of highly skilled graduates, such as Bogopa.

As diamond prices are now falling, economic growth has slowed to just 1.6 percent year-on-year in the second quarter and unemployment is stuck at around 20 percent, with youth joblessness believed to be much higher.   Continued...

Rough diamonds during their sorting process are seen at the Botswana Diamond Valuing Company in Gaborone. REUTERS/Juda Ngwenya